President William Ruto has signed the Tax Laws (Amendment) Act, 2026, and the Kenya Revenue Authority (KRA) Amendment Act, 2026, extending tax relief on petroleum products and introducing changes aimed at reducing construction costs and improving revenue collection.
Ruto assented to the two laws on Friday, October 16, at Eldoret State Lodge in Uasin Gishu County.
The Tax Laws (Amendment) Act extends the reduction of Value Added Tax (VAT) on petrol, diesel and paraffin from 16 per cent to 8 per cent for an initial 90 days, in a move aimed at cushioning Kenyans against high fuel prices.
The reduced rate may be extended for a further 90 days through a Gazette notice issued by the Cabinet Secretary.
The law also introduces changes to excise duty and tax provisions affecting construction materials, including tiles, sanitary ware and selected glass products. The reforms are intended to lower construction costs, support the housing industry and create jobs, including through affordable housing projects.
The Act further amends selected provisions of the Tax Procedures Act, including timelines under Section 47, to improve tax compliance processes.
“On its part, The Kenya Revenue Authority (Amendment) Act strengthens KRA’s governance and financing, improving efficiency and revenue collection without increasing taxes,” Ruto said.
The KRA Amendment Act introduces changes to the authority’s board structure by removing the ex-officio designation from board members and placing them under uniform rules governing appointment, resignation and termination. The rules are to be administered by the Cabinet Secretary, while the President will oversee matters relating to the board chairperson.
The law also adds the Managing Director of the Kenya Ports Authority as a full member of the KRA Board to strengthen coordination between customs administration, trade logistics and port operations.
In addition, the Act provides for guaranteed funding for KRA equivalent to at least 2 per cent of its estimated annual revenue collection.
The authority will also receive a performance incentive equivalent to 3 per cent of actual quarterly revenue collected above the projected target.
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